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China Unicom denies African expansion
Published on: 2010-02-20
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When Nigeria announced the sale of its former telecom monopoly to China's second-largest mobile carrier, it appeared to be yet another example of a Chinese investment in one of the fastest-growing markets in Africa. Now it's turned into just another example of the inherent difficulties of operating there.

China Unicom ( CHU - news - people )'s office in Hong Kong confirmed Friday that it was not part of the consortium that bid $2.5 billion for Nigerian Telecommunications (Nitel).

Conflicting reports surrounding the sale of Nitel began to emerge shortly after the Bureau of Public Enterprises announced on Tuesday that New Generation Telecom had been selected as the preferred bidder.

The privatization office had said that the winning consortium included China Unicom, Minerva Group of Dubai and local operator GiCell Wireless.

However, China Unicom's spokesperson Sophia Tso disagreed, stating that the company had not participated in the acquisition--and had no plans to become involved, either.

The Nigerian government had been seeking to sell a 75% stake in the Nitel and its subsidiary M-TEL since June, but now that process appears to be unraveling again.

Nigeria's attempts to sell Nitel date back to 2001, when it first ended the telecom's monopoly. An offer from Egyt's Orascom in 2005 was deemed too low, and a sale to local conglomerate Transcorp was reversed last year when the government took it back.

The telecom's deteriorating infrastructure has seen its value drop to just $400 to 500 million, which is why Tuesday's announcement of a $2.5 billion bid came as a surprise to some observers.

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